In today’s business work-a-day world the thrust of many business owners is streamlining in order to save money. In the attempts to cut costs whilst maintaining efficiency and offloading unpopular and time-consuming in-house tasks many are thinking differently. Some even come to the realisation that outsourced bookkeeping is a worthwhile solution.
Good quality outsourced accounting is now regarded as a winning way to cut costs and cash in on the expertise of someone you don’t pay to train! There are a good many other reasons to consider it as a viable option in your business. It means your in-house, the employed team focuses on growth rather than number crunching.
It allows you to leverage the current and most appropriate hardware, software and personnel investments that someone other than you is committed to making. It gives you access to a fresh set of passionate and non-biased eyes. They can advise and steer you onto a path that will include some of the best financial decisions you’ll ever make.
Even with these benefits some CEOs, CFOs ad Business Owners still have control issues. They have reservations about taking the plunge into the world of outsourced bookkeeping. It does require that you trust another person or group with the lifeblood of your business. Your finances are private but if you outsource your books someone other than you or an employee gets to investigate them!
Let’s take a closer look at the top 10 most commonly voiced outsourcing issues:
1. The Issue of Confidentiality
As if it weren’t enough that you are giving someone free access to your valuable business IP there are other confidentiality issues. As CEO/CFO, you are responsible for the confidentiality of your client’s information. It is understandable that you might have concerns about handing over such information to someone you do not employ and have little control over.
So how can you make sure they’re a safe and reliable pair of hands? Our advice is to ask all your questions about an outsourcing provider’s policies and practices that you have. Don’t hold back and make sure you are happy with the answers. Read the fine print of the agreements and ask what their employees should sign and the standards that they adhere to.
2. The Security of Yours and Your Clients Data
Because confidentiality matters so much, it makes security an absolute top priority. The chances are that your outsourced Bookkeeper or Accountant will safeguard your data even better than you could imagine.
There are things you can do prevent security-related outsourcing problems from your end. Make sure the way you collect and store your information does not leak. Make sure that you document who has access to what, how & only grant that to those that need it. Ask your new partner about their data security practices. That should include their physical security and the management and disposal of data.
3. Control Freak Issues!
Some Business Owners worry that with their accounting, they are effectively handing over control of a big chunk of the business.
We suggest looking at it differently. You are not offloading responsibility, but rather streamlining particular processes. You know that this means they will be done better!
4. Outsourcing Is The Same As Downsizing
Because you are moving from in-house to outsourced bookkeeping, you may worry that “downsizing” may not be the best move for growth. It will undoubtedly be a financially beneficial step, however. It’s crucial to understand that outsourcing is not downsizing. You are gaining rather than losing people. As well as getting more experience, resources and equipment, and in the most cost-efficient way.
Make sure that your outsourced accounting service understands your organisation’s rules, goals and culture. This is done through effective communication and will make the transition easier.
5. Keeping Communication Lines Open and Flowing
Communication will make sure everyone, in-house and external, is onboard and effectively working as a single unit. It will allow smooth and open communication channels to be maintained.
This is one of the outsourcing issues that Business Owners worry about the most. Just because you’re working with a bookkeeping partner doesn’t mean that communication has to suffer. Checking in regularly in person, by phone, email and a range of modern digital conferencing mediums is a must. Utilising cloud software means logging in and monitoring can be done wherever the user is.
6. Ensuring Competence Levels
If the lines of communications are free-flowing it will ensure that preventing other outsourcing problems is easy. Another common concern is training. That is where the new staff are hired by the outsourced accounting service. You need to be sure that they are in line with your expectations.
It all comes down to the initial choice that you make as to who should be your outsourced bookkeeping firm. It is so important to get that right. Don’t be worried about asking your outsourcing provider how qualified their staff are. You might also want to see their certification or qualifications. You need to know how knowledgeable they are with local accounting & tax regulations and practices.
7. What Resources Are at Their Disposal?
Business Owners like to think that just as they invest in their staff for training etc that their resources are fully up to date and current. Truth is they generally are not as current as you might think. On the other hand, the reputation of the Bookkeeper or accountant depends on their ability to do what they say they are going to do! This can only be achieved effectively with the most up to date software, hardware and staff training.
You can be fairly certain that their resources will outstrip yours.
8. How Much Will It Cost You?
There are some Business Owners that see an outsourced accounting option as a superficial cost. We would suggest however, that it is more likely to be a long-term saving and a large one at that! One of the reasons is that it is not you who has to provide that physical space for accounting people and equipment anymore. It’s not you who needs to upgrade and maintain hardware and software anymore. It isn’t you ensuring that they are getting the specialised supervision and training that means they’ll spot something in your financials. Something that could save you a lot of money.
9. How Much Time Do I Need to Spend?
As any on the ball CEO/CFO or Business Owner knows, time is money. One of the most common outsourcing concerns is that moving things externally will slow everything down. You’re waiting for an answer to an email. You’re calculating a time-zone difference. You’re wasting time and let’s face it, wasted time is wasted money.
Effectively outsourced bookkeeping functions should save you time rather than cost you time. Every minute that your new partners are running the accounts, you’re managing staff and turning profits. As an Aussie company, your ideal outsourced accounting service is therefore also in Australia. That means they are at the end of the phone, and also in the cloud. A software package such as Xero means your financial data is readily available to both you and them.
10. How Flexible Will They Be?
CEO/CFOs and Business Owners will worry that when they outsource, they lose the nimble flexibility that an in-house bookkeeping solution provided.
Our experiences show that outsourced accounting is actually the more flexible option, by a long way. Think about it. When you employ your bookkeeping staff you need to go through the hiring process. Then of course there is the training. The space and equipment and then letting them go when no longer needed or they don’t come up to the mark. Opting for an outsourced solution means you can pick and choose from tax, debt, payroll and other specialised services. When you don’t need them, you don’t use them.
Prevent outsourcing problems before they happen
When it comes to getting outside help with those all-important finances, it’s only natural that the savvy CEO/CFO needs to have an eagle eye on preventing outsourcing problems before they arise. Have a think about the things you currently outsource, and you will realise we do it a lot! There are things that others do better than we do and it makes sense to pay them to do it while you get on and do what you are good at! Did you make the desk you’re sitting at or the computer you are using? Do you always make the food you eat or every know and again do you eat out? All examples of outsourcing!
At the end of the day, it’s all about making the perfect outsourcing choice. Liz Peacock and the team at Keeping Numbers understand your concerns all too well. You are welcome to get in touch and have a chat about where you are at and where you want to be as far as your bookkeeping and BAS Lodgement is concerned. Liz is happy to discuss how outsourcing may be the exact thing you’ve been looking for. Give Liz a call on 0405 801 119 or email her here.